Discounts and election fatigue: What to expect for the holidays

With about a month to go until Black Friday, marketers are wondering how this year will stack up against previous holiday seasons. Amazon’s Prime Big Deal Days, which ran October 8 and 9, saw lower U.S. sales than last year. This runs counter to an Adobe projection of a record-breaking ecommerce holiday season.

A closer look at Amazon’s October promotion shows a silver lining, however. Despite extreme weather in the Southeast this month, promotions in the U.S. and globally seemed to work well with customers, especially when prices were cut.

Dig deeper: 2024 online holiday spending set for record year with $240 billion in sales

A look at Prime Big Deal Days

Globally, non-Amazon retailers had flat sales growth compared to last year, according to Salesforce. In the U.S. retailers saw a 5% decline in sales. Europe, on the other hand, was up 9% YoY.

Amazon fared better for conversions than its U.S. competitors, who held promotions the same week. Ecommerce tech solution PriceSpider measured conversion rates on October 8 and found Amazon (12.6%) far ahead of Walmart (8.1%) and Target (4%).

U.S. web traffic was down 2% for October 8 and 9, Salesforce said. Retailers weren’t driving the same traffic or purchases as they did last year. A contentious election and bad weather in the Southeast appear to be key factors.

“Amazon Prime Big Deal Days performance was lower than expected this year, most likely due to recent weather events and consumer uncertainty around the upcoming U.S. election,” said Caila Schwartz, director of consumer insights at Salesforce. “And while discount rates were more enticing than last year, retailers still stayed conservative in preparation for robust Cyber Week deals, contributing to the fall in overall results.”

Europe’s sales numbers raise the possibility that U.S. shoppers will be in a buying mood after Election Day.

Gift buyers seeking deals

Prime Big Deal Days offer a glimpse into shopping trends for the rest of the season. Thus far, the discounts are bigger, according to Salesforce — good news for shoppers and a signal to retailers to consider slashing prices.

During Prime Big Deal Days, U.S. discount rates were up 4% year-over-year, for an average discount rate of 21%. Globally, discount rates rose 9% over last year. The global average this year was 18% for Prime days.

The highest discounted categories globally were general apparel (average discount 27%), electronics and accessories (20%) and health and beauty (17%). The electronics category saw a significant increase in discount rate, up 25% year-over-year.

In the U.S., the biggest discounts were in general apparel (31% average discount), health and beauty (20%) and food and beverage (13%). The health and beauty discount rate was up 27% YoY. Food and beverage’s discount rate was up 23% YoY.

Discounts proved to be an effective tool to drive sales for discounted categories. Here are the top performing categories globally:

• Electronics (+36%)
• General apparel (+36%)
• Health and beauty (+21%)

Preparing for Cyber Week and beyond

Did Prime deals in October catch shoppers off guard? Likely not. This is the third year Amazon launched an October Prime promotion, and other retailers followed suit.

It’s still possible sales will reach or exceed Adobe’s projection for Cyber Week — over $40 billion in sales for those few days. Less than a third of customers in all income brackets only buy gifts in December. Many more budget their gift purchases months in advance or even for year-round purchases.

As Cyber Week approaches (November 28 through December 2 this year), digital marketers shouldn’t skip over Black Friday and focus only on Cyber Monday, according to Omnichannel marketing platform Skai.

“Black Friday was the biggest shopping day in 2023, as data reveals it dominated the Cyber Five with 17% higher retail media spending and 21% higher ad-driven sales than Cyber Monday,” said Megan Harbold, Skai’s VP strategy and growth. “However, marketers need to be aware of how consumer sentiment around timing for holiday promotions is evolving this year to inform their Black Friday strategies.

Seventy percent of consumers see Black Friday as a key date, according to Skai research. Additionally, 60% of consumers surveyed said they’d consider waiting until January for better deals.

Dig deeper: TikTok users have post-holiday shopping plans

“With this in mind, marketers should test early promotions to ramp up for their Black Friday deals to cater to different audiences and drive sales,” said Harbold. “They may also want to explore extending their promotions and media support beyond Black Friday alone to capture potential post-holiday deal seekers.”

The post Discounts and election fatigue: What to expect for the holidays appeared first on MarTech.

Source link